Eurozone banks' returns on equity were "still well below their costs of equity", Danièle Nouy, the European Central Bank (ECB) supervisory board chair said today (February 23). Banks were consequently "moving into riskier territories", like high-yield bonds, "driving risk premia to historic lows", Nouy told an audience in London.

There might be an "abrupt reversal" of this situation, Nouy said, "exacerbated by illiquidity in some segments of fixed-income markets". That might cause banks to